Housing market report on property prices and activity plus predictions

The top performing North West saw prices grow by 3.8% year-on-year in May. The average price of a property in the North West is now £232,258. Northern Ireland also continues to show strong annual growth, up 3.2% over the same period.

Yorkshire saw an year-on-year growth of 0.9% in May bringing the average house price in God’s Own County to £206,351

House prices in Scotland also increased, with a typical property now costing £204,952, +1.9% more than the year before. In Wales, house prices grew annually by +0.7% to £219,483 (vs +1.1% in April).

Eastern England recorded the largest decline in annual growth across the UK. House prices there now average £329,853, down 0.8% in May on an annual basis.

Unsurprisingly, London continues to have the most expensive average price tag, now at £536,821, up marginally by 0.2 per cent compared to last year.

Amanda Bryden, Head of Mortgages, Halifax, said: “UK house prices were largely static in May, edging down slightly by 0.1% or around £170 in cash

terms. On an annual basis house prices rose for a sixth consecutive month, up by 1.5% vs up 1.1% in April. The average property price now stands at £288,688.

“Market activity remained resilient throughout the spring months, supported by strong nominal wage growth and some evidence of an improvement in confidence about the economic outlook. This has been reflected in a broadly stable picture in terms of property price movements, with the average cost of a property little changed over the last three months.

“A period of relative stability in both house prices and interest rates should give a degree of confidence to both buyers and sellers. While homebuyers and those remortgaging will continue to respond to changes in borrowing costs, set against a backdrop of a limited supply of available properties, the market is unlikely to see huge fluctuations in the near term.”

Over at Zoopla, analysts opinions differ from those of Nationwide. They say that the UK is currently experiencing the highest supply of homes for sale in eight years and greater choice for buyers will keep house prices in check for the remainder of 2024.

They add that the growth in supply, which is now at an eight-year high compared to the same four-week period last year, has been driven by a rebound in the number of three and four bed homes for sale. The average estate agent office has had 31 properties for sale, compared to 26 properties this time last year.

While most homes for sale are new to the market, 31 % of homes for sale were marketed in 2023. Rising mortgage rates saw demand weaken, but homeowners have now returned to the market.. This increase in the supply of homes for sale boosts choice for buyers and is expected to keep house price growth in check over the rest of 2024. Sales agreed are up 13% year on year.

The South West has seen well above average growth in the number of homes for sale. There are a third more homes for sale compared to this time last year. Tax and planning changes in relation to holiday lets and the prospect of double council tax for second homes are likely to exacerbate the increase in homes for sale in this region, which has the highest levels of second home ownership.

The general election in early July is expected to have a modest impact on housing market activity and Zoopla analysts say an increase in fall-throughs is unlikely due to the election announcement as there is not a huge divide in policy between the two main parties.

The north south divide in annual house price growth continues with modest house price falls across Southern England. The strongest house price growth was in Belfast (+3.6%), Burnley (+2.5%) and Bolton (2.4%), and the highest house price falls in Ipswich (-3%), Hastings (-2.7%) and Norwich (-2.4%).

Yorkshire is in the black with a 0.8 per cent growth in house prices last month.

The variation in house price growth is primarily driven by affordability pressures in the face of higher mortgage rates. Across the south of England, price falls are focused on coastal cities and those where prices jumped higher over the pandemic during the ‘race for space’ where demand is now weaker. House prices are rising in cities with below-average house prices where the impact of higher mortgage rates is less pronounced.

Zoopla expects this north/south divide in house price growth to continue for the remainder of 2024 as incomes and house prices re-align across the country.

Commenting on the latest report, Richard Donnell, Executive Director at Zoopla says: “The growth in the supply of homes for sale is evidence of renewed confidence amongst homeowners, some of whom delayed moving decisions in 2023. The quarterly rate of house price inflation has picked up in recent months as more sales are agreed and prices firm. The announcement of the election will slow the pace at which new sales are agreed while greater choice for buyers will keep house prices in check over 2024. It's essential that those serious about moving in 2024 price their homes realistically if they want to achieve a sale.”